Antitrust Lawyer Blog Commentary on Current Developments

British Airways Plc and Korean Air Lines Co. Ltd. agree to plead

On August 1, 2007 the DOJ’s Antitrust Division announced that British Airways Plc and Korean Air Lines Co. both pled guilty and individually agreed to pay $300 million each in criminal fines for their roles in conspiracies to fix the prices on passenger and cargo flights.

The DOJ stated that passengers who flew on British Airways flights between the United Kingdom and the United States during the charged period paid more for their tickets as a result of the illegal cartel. In 2004, British Airways’ fuel surcharge for round-trip passenger tickets was around $10 per ticket. By the time the passenger conspiracy was cracked in 2006, the surcharge was nearly $110 per ticket¬. During the air cargo conspiracy, British Airways’ fuel surcharge on shipments to and from the United States changed more than 20 times and increased from 4 cents per kilogram of cargo shipped to as high as 72 cents per kilogram.

The DOJ charged Korean Air with agreeing with air cargo competitors on rates charged to customers in the United States and elsewhere for international air cargo shipments. The conspirators agreed to increase the fuel surcharge over time from 10 cents per kilogram to as high as 60 cents for each kilogram of cargo shipped from the United States. Korean Air was also charged with reaching an agreement with its rival to fix certain passenger fares for flights from the United States to Korea.

The DOJ’s enforcement actions demonstrate that the Antitrust Division will investigate and prosecute illegal cartel activity, here and abroad, in order to ensure that American consumers and businesses are not harmed by illegal cartel activities.

Andre Barlow

(202) 589-1834


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